Economic decisions lie at the heart of business. Consequently, they are fundamental to its success. This course will allow business professionals to apply fundamental economic principles to real-world business challenges. Participants will gain knowledge and skills needed to craft successful business strategies. They will also learn how to analyze and assess the micro and macro environment in which their business operates in order to drive critical business decisions.
Course Methodology
On this course, participants will be able to interact with instructor, view slides, participate in group discussions, and complete team exercises and case studies.
Course Objectives
By the end of the course, participants will be able to:
Interpret economic knowledge and establish the economic objectives of their firm
Estimate demand and analyze how demand elasticity affects revenues
Estimate cost and use different pricing strategies for a variety of market structures
Analyze the impact of essential macroeconomic indicators on the firm’s strategic decisions
Understand the implications of government economic policies on the economy in general and on businesses in particular
Target Audience
Managers, business professionals, and individuals who have decided to explore how good economic decision making is fundamental to the success of business.
Target Competencies
Economic reasoning and analysis
Strategic thinking
Micro and Macroeconomics
Problem-solving and decision-making
Course Outline
The firm and its goals
The economic goal of the firm and optimal decision making
Goals other than profit
Economic goals
Economic objectives
Noneconomic objectives
Maximizing the wealth of stockholders
Market Value Added (MVA)
Economic Value Added (EVA)
Economic profits
Global application
Demand estimation and forecasting techniques
Demand elasticity and the revenues of a firm
Price elasticities of several industries
Economics in practice: ‘Elasticities at a Delicatessen in the Short Run and Long Run’
Demand estimation
Regression analysis application
Forecasting techniques
Expert opinion
Opinion polls and market research
Surveys of spending plans
Economic indicators
Projections
Estimation of cost, pricing, and output decisions
The importance of cost in managerial decisions
The definition and use of cost in economic analysis
Examples of ways companies have cut costs to remain competitive
Cautionary note about the use of cost-cutting as a strategy
Pricing and output decisions: Perfect competition and monopoly
Pricing and output decisions: Monopolistic competition and oligopoly
Special pricing practices
Break-even analysis (Volume-Cost-Profit)
Macroeconomic indicators and the firm’s strategic decisions
The importance of the business cycle to businesses
Economic growth and its positive effects
Factors affecting the economy and the firm
Inflation
Interest rates
Unemployment
Exchange rates
Exchange rates effects on imports, exports, and real GDP
The effects of government economic policies on businesses
The way fiscal policies affect businesses
Expansionary fiscal policy
Contractionary fiscal policy
The way monetary policies affect businesses
Expansionary monetary policy
Contractionary monetary policy
The effect of public debt on the economy and businesses
The balance of trade and its impact on currency exchange rates